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Belinda and Richard Long - Source: ONE News -
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Banks are facing more pressure to lower interest rates with the latest appeal coming from the Reserve Bank.
Reserve Bank governor Alan Bollard has put the official cash rate on ice, keeping it at 2.5% but he has told banks they need to start dropping their rates.
The official cash rate been slashed by a total of 575 basis points since last July where it had been sitting at 8.25% since September 2007.
Banks have responded by saying the profits they are making are crucial to a stable banking sector.
But what does this mean for those at home?
Belinda and Richard Long risk losing their home. They are struggling to meet mortgage repayments since Richard lost his job in January.
Their bank is refusing to give them any relief, despite Richard now being diagnosed with cancer.
"They're not even willing to come to the party and look after those that are really in trouble. They would probably rather that we lose our house to be honest," says Richard.
The Longs don't think banks are shouldering their share of the recession's burdens, a sentiment also shared by the Reserve Bank Governor.
"The banks do need to weigh up their responsibilities to shareholders against their responsibility to the New Zealand economy. They do have a responsibility to the New Zealand economy to help our recovery," says Bollard.
Bollard is sending a message to banks to drop their short term rates.
He told a Parliamentary Committee that despite tough times, the profits banks make on those rates are higher than normal.
That committee is now considering an inquiry.
Labour estimates home owners are being overcharged by up to $2 billion a year on mortgages.
"He's saying that banks have not just kept them the same, or not reduced them enough, he's saying that they've actually put their short-term lending margins up. I find that extraordinary in a recession," says David Cunliffe, Labour's finance spokesman.
Only eight banking groups internationally still have a double 'A' credit rating. Among them is one of New Zealand's major banks, which says it needs to keep making big profits to retain top ratings.
"Without that profitability that supports our double A rating, it would be very difficult to access funds offshore to continue to support New Zealand businesses as well as the household sector," says Ken Christie, BNZ's Chief Financial Officer.
The Reserve Bank has also reiterated again on Thursday that it plans to hold the OCR low until late next year, which will help keep their rates low.
But Belinda and Richard Long say they are not seeing any benefits.
"To be honest we're poorer than we've ever been," says Richard.
There is now talk that the level that trading banks are at currently is about as low as they will go.
The OCR has nearly reached the end of its usefulness in New Zealand's economic recovery, the biggest threat right now is the recent surge in the dollar and Bollard's hoping that will prove short lived.
Meanwhile, the Longs hope to keep meeting their mortgage repayments long enough to raise their son in the place they call home.
